Sub-prime fears 'overdone' - Lincoln

Stuart Tyler, Lincoln’s senior investment analyst, says a recent Deutsche Bank study indicates US house prices would need to fall by 25% per annum over the next two years to justify the price falls seen in sub-prime debt linked bonds. “While there will be some economic slowdown in the US, the housing market is unlikely to suffer as much as the bond markets expect,” he says. “April will be pivotal, because this will be when many of the low fixed rate deals associated with sub-prime mortgages expire. “The impact of that on house prices and the wider economy will be interesting.” The fir...